This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Facebook: When the Buyer Did Not Beware

And, of course, when you lose money because you're green, pure as the driven snow, lazy or uninformed, what do you do in the land of self-entitlement? You get bitter and sue somebody's butt!

There's a class action lawsuit out there claiming that Facebook CEO Mark Zuckerberg "knew FB stock was grossly overvalued" and "sold more than $1 billion worth of the social networks stock just before prices started tumbling."

First of all, he sold the stock before it was a public security. Second, have any of the plaintiffs looked into how an IPO functions? Where do they think the shares for the public offering come from? Santa Claus? Do they grow on trees? Does the tooth fairy leave them under Morgan Stanley's pillow on IPO eve? Private investors sell into IPOs. That's how they work for goodness sake.

And, if Zuckerberg decided to unload because of a drag on revenue, he did it on the aforementioned publicly available information.

Assigning Blame

If anybody deserves to be ripped for what happened when Facebook went public, it's Nasdaq.

Unlike the rest of Main Street and large swaths of "investors" looking to make a quick buck, I bought three measly shares of FB shortly after the open on May 18. There was no way I was buying any meaningful number of shares. With the media certain to turn on Facebook, I want as much bad news as possible before I buy. I'm still waiting.

In any event, I bought the token shares simply to be part of the process. I am glad I did. Nasdaq screwed up my order as well. It was pending for about four hours before I received confirmation that it even went through. I got hosed. Had I rubbed the rabbit's foot in the morning and bought a large number of shares, I would have been freaking out. But, I didn't. And that's because I have the required knowledge to be part of the game.

Please do not take that the wrong way. I have made my share of stupid trading and investing mistakes in the past. I have paid dearly for them. I still make them, however, thanks to experience, I no longer pay dearly. Such is the process called life. We learn from our mistakes.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
FB $83.30 0.35%
AAPL $123.25 -0.80%
GOOG $548.34 -1.23%
TSLA $185.00 -2.84%
YHOO $45.10 1.42%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs